United States: White House Issues Cybersecurity Executive Order - Every Sector Of The U.S. Economy Will Potentially Be Affected

Christopher DeLacy and Jason Klitenic are Partners and
Joel Roberson an Associate in ourWashington D.C.office

The long-awaited cybersecurity executive order (EO), which
will ultimately establish national cybersecurity standards for
critical infrastructure, was issued by President Obama on February
12, 2013. At the same time, the White House issued a Presidential Policy Directive/PPD 21, which
further advances the White House cybersecurity policy.

This EO and accompanying policy directive are intended to launch
a multi-year standards-setting, regulatory and legislative process
that will result in new cybersecurity standards, regulations,
information-sharing channels, and changes in liability for critical
infrastructure and government contractors. On February 13, 2013,
the White House, Department of Homeland Security (DHS), National
Institute of Standards and Technology (NIST), Department of
Justice, and National Security Agency provided a joint presentation
on the contents of the EO and next steps in its implementation.

Why Does the EO Matter?

The EO has the potential to touch upon every sector of the U.S.
economy. For the vast majority of U.S. critical infrastructure that
is owned or operated by the private sector, the EO could have a
profound effect. Businesses that do not define themselves as
critical infrastructure may nevertheless be impacted by the
executive order if their customers or affiliates include critical
infrastructure. As a result, implementation of the EO and any
companion legislation will create a number of opportunities and
risks for a variety of industry sectors. Existing cybersecurity
practices, standards or regulations could be incorporated, altered,
or rendered obsolete by the new federal standard.

What Does the EO Do?

The EO includes major roles for DHS and NIST:

The EO is designed to address Critical
Infrastructure, which is defined as "systems and
assets, whether physical or virtual, so vital to the United States
that the incapacity or destruction of such systems and assets would
have a debilitating impact on security, national economic security,
national public health or safety, or any combination of those
matters."

DHS will designate certain industries as Critical
Infrastructure at Greatest Risk, which is defined as
"critical infrastructure where a cybersecurity incident could
reasonably result in catastrophic regional or national effects on
public health or safety, economic security, or national
security" and will begin receiving certain additional cyber
threat information.

NIST is required to establish a Cybersecurity
Framework, which is defined as "a framework to reduce
cyber risks to critical infrastructure." The Cybersecurity
Framework is required to be established within one year and must be
updated "as necessary." The framework:

"shall include a set of standards, methodologies,
procedures, and processes that align policy, business, and
technological approaches to address cyber risks"

"incorporate[s] voluntary consensus standards and industry
best practices to the fullest extent possible"

"shall be consistent with voluntary international
standards when such international standards will advance the
objectives of this order"

"shall provide a prioritized, flexible, repeatable,
performance-based, and cost-effective approach, including
information security measures and controls, to help owners and
operators of critical infrastructure identify, assess, and manage
cyber risk"

DHS is required to establish a Voluntary Critical
Infrastructure CybersecurityProgram to
encourage owners and operators of critical infrastructure to adopt
the Cybersecurity Framework. An annual report will be developed
with a list of the owners and operators of Critical Infrastructure
at Greatest Risk that are participating in the Voluntary
Cybersecurity Program. The voluntary program does not
include incentives for participation, but DHS, Treasury and
Commerce are required to submit recommendations to the president on
the establishment of incentives, which may require
legislation.

The EO is intended to increase Information
Sharing between the government and critical infrastructure
by "increase[ing] the volume, timeliness, and quality of cyber
threat information shared with U.S. private sector entities so that
these entities may better protect and defend themselves against
cyber threats." The EO will expand the Enhanced Cybersecurity
Services (ECS) program, which was previously available to
commercial service providers, to all critical infrastructure.

The EO requires an annual assessment and report on
Privacy and Civil Liberties
Protections.

What Are the Next Steps?

NIST will publish a request for
information (RFI) in the near future that solicits input from
critical infrastructure owners and operators, federal agencies,
state, local, territorial and tribal governments, standards-setting
organizations, other members of industry, consumers, solution
providers and other stakeholdersregarding "existing consensus
standards, practices and procedures that have been effective and
that can be adopted by industry to protect its digital information
and infrastructure from the full range of cybersecurity
threats." NIST will hold workshops on the EO beginning in
early April 2013. The White House indicated that it will initiate a
series of meetings with critical industry sectors to begin the
implementation process.

Congress is also expected to develop companion legislation that
may expand upon, or in some cases, restrict the scope of the EO.
Rep. Mike Rogers (R-Mich.), chairman of the House Intelligence
Committee, and Rep. Mike McCaul (R-Texas), chairman of the House
Homeland Security Committee, have indicated that they will be
introducing new cybersecurity legislation within the next few
weeks. Chairman McCaul announced his committee will hold a hearing
on the EO within two weeks. Meanwhile, the Senate is considering a
joint committee hearing that would include the Homeland Security
and Government Affairs Committee, the Commerce Committee and the
Intelligence Committee that would begin the process in the Senate
to respond legislatively to the cybersecurity executive order.

Accordingly, interested parties should be prepared to
participate in the NIST process and engage with the White House,
DHS and Congress as appropriate.

Why Is Legislation Needed?

The EO is designed to establish a national approach to
cybersecurity. However, an EO is limited to existing statutory
authority, so legislation will be necessary to address those issues
that the president could not address in the EO, such as liability
protections, incentives for participation and parameters for
information sharing. President Obama announced the issuance of the
cybersecurity executive order and called on Congress to pass
legislation to address these gaps in the 2013 State of the Union address:

America must also face the rapidly growing threat from
cyber-attacks. (Applause.) Now, we know hackers steal people's
identities and infiltrate private emails. We know foreign countries
and companies swipe our corporate secrets. Now our enemies are also
seeking the ability to sabotage our power grid, our financial
institutions, our air traffic control systems. We cannot look back
years from now and wonder why we did nothing in the face of real
threats to our security and our economy.

And that's why, earlier today, I signed a new executive
order that will strengthen our cyber defenses by increasing
information sharing, and developing standards to protect our
national security, our jobs, and our privacy. (Applause.)

But now Congress must act as well, by passing legislation to
give our government a greater capacity to secure our networks and
deter attacks. This is something we should be able to get done on a
bipartisan basis. (Applause.)

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